Corporate Objectives

Exco has long recognised the prospectivity and strategic value of its >4,700km2 land package in NW Queensland. This prospectivity is evidenced by the current 35Mt resource base which contains not only 344,580 tonnes of Cu and 347,200 ounces of Au, but also significant uranium.

The Board, backed by the Company’s major shareholders including Ivanhoe, Lion Selection and management, believe there is potential to significantly increase this resource base through further exploration and resource development.

Expenditure to date in NW Queensland, since the Company’s listing in 1998, has totalled only A$12.5 million. Exco recognized the opportunity to create a step-change by significantly increasing the level of expenditure to >A$5 million per annum and the Company is now in a position to do this post the Capital Raising exercise which was finalised in July 2007.

Exco therefore intends to accelerate its plans through a more intensive resource development and a greenfields copper-gold-uranium program primarily focused on the Cloncurry Copper and Hazel Creek / Boomarra Project areas. The ultimate aim of the Company’s strategy is to position Exco to take advantage of sustained Cu demand, projected supply gaps and the positive forward price outlook for copper, gold and uranium.

CAPITAL RAISING

In May 2007, the Company announced that it had undertaken a placement of 40,900,000 shares at an issue price of A$0.30, to raise approximately A$12.27 million before expenses. The issue price represented a 7% premium to the 20 day volume weighted average price at the time of placement.  The placement comprised of the following components:

• Subscription Agreement with Ivanhoe Australia Pty Limited for 26,400,000 shares. These shares were issued immediately.
• A further 14,500,000 shares were issued to additional participants including Lion Selection Limited and clients of Stripe Capital Pty Ltd. The issue of these shares was subject to shareholder approval which was sought and approved at a General Meeting held on the 20th of June 2007.
• Each participant will receive 4 options for every 5 shares issued; this was also subject to shareholder approval. The options are exercisable at A$0.35 each (a 25% premium to the current 20-day volume weighted average price) on or before 1 June 2008.

 RELATIONSHIP WITH IVANHOE

The Board is pleased to welcome Ivanhoe Australia Pty Ltd (IAL) as the Company’s newest and largest shareholder. IAL is a wholly owned subsidiary of Ivanhoe Mines (listed on the NYSE and TSX).  In subscribing for 26,400,000 shares IAL has invested A$7.92 million and now owns approximately 12% of Exco’s issued capital.

Like Exco, Ivanhoe is focused on a portfolio of prospects in NW Queensland. Ivanhoe’s 100%-owned Cloncurry Project covers the majority of the historic Selwyn Mining District.  Exco and Ivanhoe recognise potential synergies between their substantial tenement positions in this highly prospective region. Ivanhoe’s investment and Joint Venture with Exco represents the first steps towards realising these synergies.

CONTINUED SUPPORT FROM LION SELECTION LIMITED (LST)

Exco is pleased to acknowledge Lion Selection Limited’s ongoing support of the Company and its activities. LST subscribed pro-rata for a further 4,264,000 shares and 3,411,200 options and retain a 10.5% holding in Exco.

PLANNED APPLICATION OF FUNDS

The proceeds of the recent capital raising will be predominantly used to fund increased resource development and exploration activities on the Company’s Cloncurry copper-gold-uranium projects in NW Queensland.